Official Statement by The Conference Board The Conference Board Consumer Confidence Index®, which had increased in January, improved further in February. The Index now stands at 70.4 (1985=100), up from 64.8 in January. The Present Situation Index improved to 33.4 from 31.1. The Expectations Index increased to 95.1 from 87.3 last month. Says Lynn Franco, Director of The Conference Board Consumer Research Center: “The Consumer Confidence Index is now at a three-year high (Feb. 2008, 76.4), due to growing optimism about the short-term future. Consumers’ assessment of current business and labor market conditions has improved moderately, but still remains rather weak. Looking ahead, consumers are more positive about the economy and their income prospects, but feel somewhat mixed about employment conditions.”

Trend The current trend is now strongly upwards. The February Consumer Confidence Index of 70.4 (preliminary) is above the ascending 12-month moving average of 57.2 and has been for 4 consecutive months (see chart below). The current CCI continues above the slightly ascending 24-month moving average of 52.9 and has been for 12 consecutive months. The current CCI is above the 36-month moving average of 51.8 for the 4th consecutive month, after being below the prior 5 consecutive months. (The 24-month and 36-month moving averages charts are not shown on this page).

Cycle History The current Consumer Confidence Index (CCI) in February of 70.4 (preliminary) is down -41.5 and -37% from the cyclical peak of 111.9 in July 2007. The current CCI is up +45.1 and +178% from the Great Recession cyclical bottom of 25.3 in February 2009. Therefore, the CCI is now closer to the cyclical high than the low, but approximately mid-range.

Monthly Consumer Confidence Index (Chart) Below is a chart of the past 44 months of The Conference Board CCI (preliminary) from the July 2007 cyclical high of 111.9 through the latest month reported, February 2011. As can be seen, the CCI bottomed at a Great Recession cyclical low in February 2009 and the Great Recession officially ended in June 2009. After a peak in May 2010 of 62.7, the CCI has been in a range from a low of 48.6 in September 2010 to a high of 70.4 in February 2011. The current CCI of 70.4 (preliminary) continues well above the recent lows of 48.6 in September 2010 and 46.4 in February 2010.

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Consumer Confidence Index 12-Month Moving Average (Chart) Below is a chart of the latest 42 months of The Conference Board Consumer Confidence Index 12-Month Moving Average from August 2007 through the latest month reported, February 2011 (preliminary). The previous chart above, the Index of Consumer Sentiment, is rather like following the bouncing ball when charting human sentiment, confidence, mood, and outlook regarding the USA economy and their outlook for their financial prospects. Therefore, the 12 month moving average chart smooths out these short-term ups and downs, greed and fear, optimism and pessimism. The Pre-Great Recession peak was in August 2007 at 107.8 while the Great Recession low was in September 2009 at 42.7. The Post-Great Recession peak has been the February 2011 (preliminary) at 57.2. The 12 month moving average has been ascending for 5 consecutive months, after a 3 month dip.

Commentary The February 2011 Consumer Confidence Index of 70.4 (preliminary) is a surprising and substantial increase of +4.8 (preliminary). The CCI is at a 26 month high, the highest since February 2008. The CCI continues well above the recent lows of 48.6 in September 2010 and 46.4 in February 2010. The current uprisings in the Middle East and the spike in oil prices could translate to a lower consumer confidence as a result of higher gas prices if this crisis persists.

The Thomson Reuters/University of Michigan's February 2011 reading on consumer sentiment is at an 8 month high [USA Consumer Sentiment at 8-Month High (Charts) "Further proof U.S. economy rebounding at stronger pace than expected"]. Also, the daily Gallup Economic Confidence Index is at a 3-year high. Dennis Jacobe, Gallup Chief Economist attributes this increased optimism to "It may be that the start of a new year, the more cooperative tone in Washington, the continued gains on Wall Street, the Federal Reserve's continuing efforts to stimulate the economy, and the extension of the Bush tax cuts late last year have combined to make all Americans - and particularly upper-income Americans - more optimistic about the U.S. economy. Confidence is also up despite fears of continued financial problems in Europe, inflation problems in Asia, and state and local financial problems as well as housing issues in the U.S."

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